Changes in the economy occurring around 1970 were worrisome. Not that everything had gone wrong. Good things had happened and continued to happen. But even those who held no corporate stocks or bonds and cared nothing about Wall Street sensed uncertainties.
The Economic Picture
In the 1960s the gross national product had increased at an average rate exceeding 4 percent. By the end of the 1970s the increases had declined to 2.9 percent per year. Between 1970 and 1973 purchasing power, adjusted for inflation, grew by 7 percent. In the remainder of the 1970s there was no growth at all. The inflation rate by the end of the 1970s had risen to 12.5 percent. Americans had always prided themselves on having the highest standard of living in the industrialized world, but in the 1970s it dropped all the way from first to tenth. There were reasons to believe that in fighting the war in Vietnam, continuing the cold war, and waging war on poverty the United States had taken on too much.
The personal security of families and individuals depended mostly on good jobs with good wages. The unemployment rate in the civilian labor force in 1967 was 3.8 percent. After slight annual fluctuations it rose to 5.9 percent in 1971, declined slightly over the next two years, and shot up to 8.6 percent in 1975. The median family income in 1974 was $12,836, In constant dollars, that was below the level of the two previous years and barely above the level of 1970. In contrast, the median family income had increased by more than 15 percent between 1965 and 1970.
A mild recession in 1969 and 1970 did not hurt the majority of wage earners, but it deepened their worries. A variety of economic concerns,